$23 Million Medical Alert Scam Busted by FTC

It seems like these days, news of a medical alert scam surfaces almost every month. They seem to be cropping up and targeting seniors, perpetuated by more than one group. The good news is that at least one scheme was shut down late last year.

Update July 2015: The FTC is suing LifeWatch Inc for “deceptive robocalls to trick older consumers throughout the United States and Canada into signing up for medical alert systems.” See details here. According to the FTC, LifeWatch worked with Worldwide Info Services, a robocall provider that was sued by the FTC as reported here on this page. After Worldwide Info Services got busted, LifeWatch switched to a new robocall provider but continued with a similar scheme.

In Nov 2014, a counterfeit scheme that attempted to target and pinch money from seniors was busted by the Federal Trade Commission (FTC). The scam, which has swindled a total of US$23 million from innocent elders, operated this way: a victim, typically profiled as someone who is elderly, living by himself/herself and with limited or fixed means of income, receives a pre-recorded sales call telling that somebody – a relative, friend or acquaintance, has bought them a medical alert system which they are entitled to claim for free.

The victim will then be prompted to press the number One (1) on their phone to speak to a representative and know more about the medical alert system. Such person goes on with the trick by telling the victim recommendations from reputable health institutions like the American Heart Association to boost the credibility of what they are offering and encourage the victim to activate the system.

A $34.95 monthly operating fee was instantly charged to the victim even if they have not installed and activated the system, which is contrary to what they were claiming during the phone conversation with the victim.

With these, the FTC filed a complaint against a number of companies such as Worldwide Info Services, Inc., Elite Information Solutions Inc. and Global Service Providers for violating Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA), the FTC Act and the Commission’s Telemarketing Sales Rule (TSR).

To settle charges, the court imposed a ruling of $23 Million, corresponding to the amount that the victims have paid for the activation and monthly operating fee of the fraudulent medical alert systems.

Such ruling will only be lifted once each of the settling defendants turn over cash and all other assets worth US$79,000 consisting of the US$24,000 cash which was transferred, even when the court has proclaimed an asset freeze against them.

Although this scheme has been shut down, there continue to be other schemes going around currently. One that has been around for several months at least is operated by fraudsters claiming to be associated with the AARP. Read more about it here: “AARP” Medical Alert Scam Targets Seniors.

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2 Responses to “$23 Million Medical Alert Scam Busted by FTC”

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  1. Michelle Dahinden says:

    Just got a call from. This company trying to scheme.

  2. Dave says:

    This scheme has NOT been shut down. It continues to opperate today. I get several phone calls a week from this company.

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